Incoming Supervalu CEO Duncan to make $1.5 million, plus extras

Sam Duncan will become CEO at Eden Prairie-based Supervalu in late February, 2013, the company said on Thursday, Jan. 10, 2013.
(Photo courtesy Supervalu)

Supervalu's incoming CEO Sam Duncan will receive a $500,000 signing bonus, an annual salary of $1.5 million, options for 1.5 million shares of stock and the chance to earn lucrative performance bonuses.

The struggling Eden Prairie-based supermarket chain, in a filing with the U.S. Securities and Exchange Commission, detailed the executive pay package that lured the former CEO of OfficeMax to take the reigns of the newly slimmed-down Supervalu.

Duncan, 61, is a retailing veteran who also has served as CEO of ShopKo Stores, president of Ralph's Supermarket and president of the Fred Meyer division of Kroger. He is expected to replace departing CEO Wayne Sales at Supervalu in February.

Last week, Supervalu announced it was essentially splitting the troubled company in two, in hopes of salvaging it. Supervalu is selling off much of its national supermarket empire -- including the Albertson's and Jewel-Osco chains -- in order to reduce its debt and strengthen the surviving, smaller company.

The new Supervalu will have three parts: a food distribution business, the Save-A-Lot hard-discount brand, and a collection of regional grocers including Cub Foods in the Twin Cities. It expects annual revenue of about $17 billion, about half of the previous level.

In its 8K filing, Supervalu said Monday, Jan. 14, that if Duncan meets performance goals, he also will be eligible for an annual performance bonus that could be as large as twice his annual salary.

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Duncan also will be allowed "reasonable personal use of the company's aircraft," and be reimbursed for up to $50,000 in legal fees connected with the negotiations surrounding his employment with Supervalu.

Last week, Supervalu warned that its new business plan included "continued focus on right-sizing operations and managing efficiencies across the company."